Reduction in duty rates across the board - Shouldn't abatement rates and rule 6 amount payment follow suit?
Abatement reduced
In DDT 1008 - 10 12 2008, we had reported,
"We have been receiving calls from anxious assessees as to whether the abatement rates for MRP based assessment, had been reduced consequent to 4% reduction in excise duties across the board. They wondered why there is no simultaneous amendment in the notification dated 01.03.2008 prescribing various rates of abatement for commodities subjected to MRP based valuation. Since the duties have been reduced by four percentage points, shouldn't these abatement rates be also reduced?
We were surprised that the assessees were so concerned instead of enjoying the benefit; then a soft drinks giant informed us that what he really wanted to know is whether such a notification had been issued and we had not carried it. He also told us, "the trade is happy; don't remind the government about this."
Well, the government has heard and the joy of the trade is short lived - just about a fortnight.
The Government had late Wednesday evening issued a notification (and we were the only ones around to cover it) amending Notification No. reducing the abatement rates - by 3% points for most of the commodities covered under the scheme; 35% abatement is reduced to 30%, 38% to 35% and 31.5% also to 30%. Manufacturers of aerated waters should be happy that there is only a marginal reduction from 40.5% to 40%.
What is the point in reducing the abatement from 40.5% to 40%? Is it a mistake?
Notification No. No. - Dated 24 December 2008